Union chiefs summon QC to investigate scandal over £100m hotel built on orders by Lynne McCloskey
- The new Secretary General of Unite said the hotel is worth less than it cost to build
- Sharon Graham succeeded former Secretary General Lynne McCluskey in August
- The hotel and convention center was built on orders from Mr. McCluskey
- The project was dubbed Red Len’s Folly and was built amid allegations of nepotism
Syndicate giant Unite has commissioned an independent QC-led investigation into a £100m hotel and conference center built on the orders of former Secretary-General Lynne McCloskey.
Mr McCluskey’s successor as Secretary-General of the UK’s largest union, Sharon Graham, revealed yesterday that the complex is now worth less than it cost to build.
The project – which was exposed by the Daily Mail last year – has been dubbed Red Lane’s Folly and was built amid allegations of nepotism.
The contract to build the four-star complex in Birmingham was awarded to a construction company owned by Paul Flanagan, a friend of the guild baron and fellow Leverbodleian.
But the costs, funded by 1.4 million Unite members, rose from £35m to £57m before construction began. The seven-storey building eventually cost £98 million.
Syndicate giant Unite has commissioned an independent QC-led investigation into a £100m hotel and conference center built on the orders of former Secretary-General Lynne McCloskey. Pictured is the Birmingham Hotel and Conference Center
Mr McCluskey’s successor (pictured) as Secretary-General of the UK’s largest union, Sharon Graham, revealed yesterday that the complex is now worth less than it cost to build.
The leftist McCluskey retired from his position as secretary general in August, just as it emerged that members would have to fund the project for at least another two years to prevent it from unraveling.
Miss Graham revealed yesterday that the complex is now of value “much less than the costs incurred in developing the site”.
“This represents a significant potential loss for Unit and must be investigated,” she emphasized.
She said the union was commissioning an independent investigation “to review the costs incurred and to address the question of how and why this difference arose”.
These questions must be answered in a timely manner, and in order to ensure transparency, the results of the investigation will be made public. I will also do my best to recover all the money owed to the guild.
She said the audit gave the completed project accounts a “clean bill of health.”
The hotel complex, which also houses new union offices and an education center, was intended to provide hotel rooms and conference bills.
Local Labor MP Khaled Mahmoud, a Unite member, said: “These are the loans of fellow members who pay for schemes like this. I salute the commitment of the Secretary-General to get to the bottom of what happened here and where the money was wasted, if that proves to be the case.
“But it is unfortunate that the previous regime was not as transparent as it appears to the new Secretary-General.”
The contract to develop the flagship hotel has been awarded to the Liverpool-based Flanagan Group. The health and safety contract was awarded to SSC, a company owned by David Anderson, son of former Liverpool Mayor Joe Anderson.
Last year, it emerged that Flanagan had been arrested on suspicion of bribery as part of a corruption investigation not linked to Unite. The three denied any wrongdoing and were released under investigation.
There is no indication that any criminal offenses were committed in the association’s dealings with either company.
McCluskey previously said hotel costs rose because the union employed contractors who paid national wage rates. He cited other factors such as health and safety measures in response to the Grenfell tragedy.
In April he claimed the project was “a reasonable investment of members’ money, resulting in a world-class facility that will return income to our union for future generations”.